PALO ALTO — A former top Google (GOOG) executive is taking a new approach to “crowd-funding” for young entrepreneurs by launching a startup on Wednesday that aims to match financiers and mentors with college grads who need capital to develop their own businesses or other projects.

Dave Girouard ran Google’s cloud software group for eight years, leading the Internet giant’s effort to sell companies and government agencies on using Google Docs and other online programs instead of traditional office software from Microsoft.

Since leaving Google in March, Girouard has been working on a plan to enter the relatively new sector known as “crowd-funding,” where companies such as Kickstarter, Prosper and Lending Club offer alternatives to such traditional financing methods as venture capital, bank loans and credit cards.

Girouard says his company, Upstart, takes a different approach. “It’s really an investment in a person, and their potential,” rather than a specific project or company, he said in an interview.

Upstart is aimed at new or recent college graduates who need money to develop a business idea, but who aren’t yet ready to form a company and seek formal investors. Upstart itself is backed by the VC firms Kleiner Perkins and NEA, along with Google Ventures, Dallas Mavericks’ owner Mark Cuban and others.

After applicants write a proposal, Upstart will try to match them with backers willing to provide at least $1,000 toward their total funding goal. In some ways, the money is more like a loan than investment, since recipients agree to repay a small percentage of their annual income over 10 years, rather than granting an ownership stake in their business.

Even so, Girouard said backers must meet the federal definition of an “accredited investor,” which sets minimum financial standards to keep out unsophisticated investors. To protect recipients, Upstart will limit how much they must pay back, each year and in total. The company hopes to make money by keeping a small slice of the funding and repayments.

Girouard said he’s hoping the people providing money will also act as mentors. He’s initially restricting the program to students or grads from a handful of universities where he hopes successful alumni will be interested in sharing advice and contacts, along with financial support.

Mentoring is not required, however. That could make the relationship less helpful than a traditional arrangement with investors, who are motivated to help because they have an ownership stake, said analyst Mark Schwanhausser, a director at Javelin Strategy & Research. He said the crowd-funding sector is still new but making “modest headway” in demonstrating the concept works.

University of Washington computer science professor Edward Lazowska was enthusiastic after meeting recently with Girouard. Upstart recipients have leeway to use their funding to cover student loans or even living expenses. Lazowska said that could make a difference for talented students who might otherwise forgo the startup path and feel obliged to seek the financial security of working for big corporations.

“Really dramatic new ideas are not often brought to market by big companies,” he added.

Contact Brandon Bailey at 408-920-5022; follow him at Twitter.com/brandonbailey

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